Delphi Automotive PLC (NYSE:DLPH) was in 49 hedge funds’ portfolio at the end of March. DLPH shareholders have witnessed an increase in enthusiasm from smart money of late. There were 42 hedge funds in our database with DLPH holdings at the end of the previous quarter.
In the eyes of most traders, hedge funds are perceived as slow, outdated financial tools of years past. While there are more than 8000 funds trading at the moment, we choose to focus on the leaders of this club, around 450 funds. It is estimated that this group controls the majority of the hedge fund industry’s total capital, and by tracking their best equity investments, we have spotted a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as key, positive insider trading activity is a second way to parse down the financial markets. There are plenty of reasons for a corporate insider to sell shares of his or her company, but just one, very clear reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this tactic if you understand where to look (learn more here).
With all of this in mind, we’re going to take a glance at the recent action surrounding Delphi Automotive PLC (NYSE:DLPH).
What does the smart money think about Delphi Automotive PLC (NYSE:DLPH)?
Heading into Q2, a total of 49 of the hedge funds we track were bullish in this stock, a change of 17% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes considerably.
Of the funds we track, Elliott Management, managed by Paul Singer, holds the biggest position in Delphi Automotive PLC (NYSE:DLPH). Elliott Management has a $972.4 million position in the stock, comprising 20.3% of its 13F portfolio. Coming in second is John Paulson of Paulson & Co, with a $386.3 million position; the fund has 2.2% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Edward A. Mule’s Silver Point Capital, Richard S. Pzena’s Pzena Investment Management and David Einhorn’s Greenlight Capital.
Now, specific money managers have been driving this bullishness. Valinor Management LLC, managed by David Gallo, created the most valuable position in Delphi Automotive PLC (NYSE:DLPH). Valinor Management LLC had 75.2 million invested in the company at the end of the quarter. Doug Silverman and Alexander Klabin’s Senator Investment Group also made a $66.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Anand Parekh’s Alyeska Investment Group, Alexander Mitchell’s Scopus Asset Management, and Tom Wagner and Ara Cohen’s Knighthead Capital.
What do corporate executives and insiders think about Delphi Automotive PLC (NYSE:DLPH)?
Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the last half-year time period, Delphi Automotive PLC (NYSE:DLPH) has experienced zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Delphi Automotive PLC (NYSE:DLPH). These stocks are LKQ Corporation (NASDAQ:LKQ), TRW Automotive Holdings Corp. (NYSE:TRW), Autoliv Inc. (NYSE:ALV), Johnson Controls, Inc. (NYSE:JCI), and BorgWarner Inc. (NYSE:BWA). This group of stocks are in the auto parts industry and their market caps match DLPH’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| LKQ Corporation (NASDAQ:LKQ) | 19 | 1 | 8 |
| TRW Automotive Holdings Corp. (NYSE:TRW) | 33 | 0 | 10 |
| Autoliv Inc. (NYSE:ALV) | 10 | 0 | 10 |
| Johnson Controls, Inc. (NYSE:JCI) | 26 | 0 | 9 |
| BorgWarner Inc. (NYSE:BWA) | 20 | 0 | 7 |
With the returns demonstrated by Insider Monkey’s tactics, everyday investors should always watch hedge fund and insider trading sentiment, and Delphi Automotive PLC (NYSE:DLPH) is an important part of this process.
